Cunningham to tighten Waukegan spending rules

Ald. Sam Cunningham, 1st, is congratulated by Waukegan resident Pamela Woods on Wednesday, April 5, after he took more than 51 percent of the vote in Tuesday's mayoral election.

Ald. Sam Cunningham, 1st, is congratulated by Waukegan resident Pamela Woods on Wednesday, April 5, after he took more than 51 percent of the vote in Tuesday's mayoral election. (Yadira Sanchez Olson / Lake County News-Sun)

Waukegan Mayor-elect Sam Cunningham has asked city staff to tighten the rules related to expenses for elected officials, effective Monday, when he is set to take office, the city's finance director said.

The directive comes amid a News-Sun inquiry into Mayor Wayne Motley's use of a city-issued credit card and his additional monthly expense allowance that has ranged between $1,500 and $1,650 during his tenure as mayor.

Motley has used the credit card to pay for city-related travel and entertainment costs, Finance Director Tina Smigielski said in an email. The credit card has been paid off using Waukegan general funds, she added, not Motley's monthly expense stipend. The credit card payments have been included with other vendor payments presented to the City Council for bimonthly approval, she said.

The result is that Motley has been keeping most of his monthly expense stipend while using the credit card to pay for city-related business, which is then paid down separately using city funds. The mayor is the only elected official with a city-issued credit card, Smigielski said.

Cunningham has verbally directed that once he takes office, if elected officials request that payments be made directly by the city on their behalf — such as payments made with the credit card — the amount will be deducted from their monthly allowance account, Smigielski said. The mayor receives a stipend of $1,500 a month, according to Waukegan's salary ordinance. There's no stipulation in the ordinance as to how the money should be spent. City aldermen and the treasurer also get a monthly expense allowance of $250 each, the city clerk gets $400 a month, committee chairmen get $75 and members of the Labor Relations Committee get $75. Motley has sometimes received more than $1,500 because he has been chair of Waukegan's Labor Relations Committee.

On occasions where expenditures paid directly by the city are not deducted from officials' expense accounts, City Council oversight would be required under Cunningham's new policy, Smigielski added.

Cunningham, who has been the 1st Ward alderman since 1999, said he had been unaware of how Motley handled his expenses until alerted by the News-Sun. Cunningham defeated the one-term mayor in the Feb. 28 Democratic primary and went on to edge Ald. Lisa May, 7th, in the April 4 general election. May ran as an independent.

"If he (Motley) was taking people out, doing city business, it should have come from that expense account that was awarded to him," said Cunningham, who will become Waukegan's first black mayor.

City documents show Motley used the credit card for large expenses such as a June 2013 trip to Las Vegas for the United States Conference of Mayors, which cost nearly $960 for lodging, taxi service and food, and a trip in October to Marco Island in Florida, for an annual meeting of the States Self-Insurers Risk Retention Group. The group, which reimbursed the city for Motley's trip, provides liability insurance to municipalities across the country.

But the mayor's credit card also was used for more routine purchases, documents show. For instance, during a billing period from April to May of last year, the mayor used the card to buy $85.41 worth of food from Quonset Pizza for city volunteers, records show. He also spent $15.50 on Metra tickets for a meeting with the U.S. Department of Housing and Urban Development and $49.96 at Waukegan's Green Town Tavern and $65.98 at Chicago's Elephant & Castle for other meetings, records show.

Meanwhile, during those same months, Motley documented other expenses for which he used his monthly stipend, including gas, a cab ride, more pizza for meetings and plaques at the ID Store.

Another example: Motley used the credit card to buy two $25 tickets to a retirement party for former Lake County Judge Fred Foreman in January 2014. The same month, he paid for an $85 ticket to the Most Influential African Americans of Lake County Awards Banquet, documents show. He did not claim any expenses related to his $1,500 stipend that month.

Motley didn't always use the credit card for his personal expenses, sometimes making purchases on behalf of the city with it. In August of last year, for instance, he used the card to buy an air conditioner for $798 because city-owned computer equipment in a parking garage was becoming overheated.

The city also sometimes paid late fees and interest charges related to the credit card, documents show. The City Council approves bills, and the city couldn't always pay on time because it had to wait for the aldermen to vote.

Cunningham said he wasn't sure if Motley's handling of his expenses aligned with the intent of city policies related to the credit card and stipend. Cunningham made a distinction between using the credit card for expensive trips to conferences and more routine items such as food purchases.

"Let's say I go on a mayor's trip or whatever, then that will be part of the mayor's budget. ... That's different than me taking somebody out to lunch or buying lunch for my office," Cunningham said.

Motley said in a phone interview that he has not broken any laws, that he had the approval of the Finance Department and that he is "so tired of being held under a microscope."

"I haven't done frivolous things with that credit card," Motley said, adding that he often paid for things out of his own pocket, such as gas for the city-owned car he used — the city bought a 2014 Ford Taurus in April 2014 for $18,144 for the mayor's use, according to a previous News-Sun report — and a trip to Japan on behalf of the city that he said cost more than $7,000. Included in Motley's pay is a vehicle allowance of around $195 that was paid about every two weeks, documents show. It was unclear how exactly Motley spent the vehicle allowance.

The mayor and aldermen receive their monthly expense stipends regardless of whether they use them for city business, Smigielski said. The expense allowances are deemed "nonaccountable" under IRS regulations and are thus considered taxable wages.

"They do not have to substantiate the expenses or return the payments if not actually used for business purposes, hence the taxable designation," Smigielski said in an email.

But officials can submit documentation of their business expenses, she added, and have that portion of the stipend reclassified as nontaxable.

In 2016, for instance, Motley received $18,900 in stipend payments, and he documented $1,481.69 in expenses for an ending balance of $17,418.31. The documented expenses weren't taxed, and the ending balance, which Motley kept, was taxed normally, Smigielski said. The year before, Motley's ending balance was $16,551.87, documents show. In 2014, the city disbursed nearly $18,900 to Motley in stipends, but he only documented $32.75 in expenses related to the stipend that year.

Meanwhile, city documents show Motley's city-issued credit card was used to make more than $17,400 worth of purchases between July 2013 and January 2017.

Money is tight at Waukegan City Hall. Budget officials projected earlier this year that the general fund will finish the fiscal year at a deficit. Documents current through March 31 show the general fund was 98 percent expended with only 92 percent of the fiscal year completed, and other city funds were already maxed out.

Motley's income reported to the Illinois Municipal Retirement Fund for purposes of calculating his pension was nearly $133,600 last year, according to the agency. It's unclear whether that figure included any part of the stipend or car allowance. A city salary schedule that includes the mayor's expense and vehicle allowances and Waukegan's $16,773 contribution toward his health and dental insurance put his total compensation at $169,275.

"I chose the credit card as a way of keeping my receipts," Motley said. "So it was easier for me and finance to keep the receipts in credit-card form."

Cunningham said he'll still use the city's credit card, but he'll do things differently.

"I'm planning on using the city credit card and having it deducted from the expense account," Cunningham said. "So whatever that amount is per month, I'll get less."

Smigielski said a salary ordinance with updated language related to Cunningham's directive will be presented to the City Council in late May or early June.